Report: USDA fails to recoup millions in improper farm subsidies

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Brendan Bordelon Contributor
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The Department of Agriculture promised to reclaim millions of dollars in farm subsidies paid out erroneously in 2009 and 2010, but years later the Government Accountability Office says their efforts have barely started and are riddled with inaccuracies.

A GAO report released Thursday states that USDA agencies determining the eligibility of farmers and landowners to receive government subsidies continue to make numerous errors, if they have even begun to retrieve the improper payments at all.

Each year between 2009 and 2012, the federal government granted around $15 billion to farmers and landowners whose income fell below a certain threshold, aiming to ameliorate the risk of a bad crop or promote conservation efforts.

Net farm income increased dramatically during that same period, more than doubling from $63 billion in 2009 to a projected $128 billion in 2013.

“In light of high farm incomes and rising federal budget deficits, the costs to the federal government of farm and conservation programs have come under heightened scrutiny,” the GAO said.

The report indicates that many farmers and landowners take advantage of the subsidy programs’ lax enforcement standards. Files reviewed from 2010 found that in most states, only around half of those who signed up for the payments were actually eligible.

In Ohio, just 29 percent of farmers receiving the subsidies actually qualified for them.

Officials from the USDA’s Farm Service Agency (FSA) and Natural Resources Conservation Service (NRCS) are supposed to go through the tax returns of recipients in order to verify that their income level meets the allowable threshold.

But the GAO’s review of 115 tax return files from the FSA saw multiple errors and an apparent disinterest in following agency procedures.

In one office, 19 of the 22 examined returns contained mistakes, one potentially leading to an improper payment of $40,000.

Agents also sometimes disregarded agency guidelines, “resulting in some questionable eligibility determinations and potential payments to participants whose income exceeded statutory limits.”

“FSA cannot be assured that the statements are accurate or that payments are being made only to participants whose incomes fall below statutory limits,” the report continues.

But the FSA is still in a better position than the NRCS, which evaluates subsidies to landowners working on conservation projects. While the FSA identified at least $143 million in overpayments to farmers between 2009 and 2010, the NRCS has not even begun to review the amount of improper payments, much less recoup any funds paid in error.

NCRS officials blamed a software update for the delay.

While the misuse of farm subsidies remains a major issue, in recent years the amount disbursed has declined slightly as eligibility requirements grow more strict.

The current farm bill expires on Sept. 30. The Washington Post reported that the House Republican leadership is still considering a new farm bill’s eligibility requirements for food stamps and other federal subsidies.

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